On September 30, 2020, Jack and Jill, competitors in business, decide to combine their businesses to form J & J Par

Their financial positions as of this date are:

Jack Jill

Cash PHP 500,000 PHP 400,000

Accounts Receivable 1,000,000.00 800,000.00
Merchandise Inventory 800,000.00 1,000,000.00
Delivery Truck 1,200,000.00
Furniture & Fixtures 1,000,000.00
Accumulated Depreciation - 400,000.00 - 300,000.00
Total Assets PHP 2,900,000 PHP 3,100,000

Accounts Payable 300,000.00 600,000.00

Capitals 2,600,000.00 2,500,000.00
Total Liabilities & Capital PHP 2,900,000 PHP 3,100,000

The conditions agreed upon by the partners for the purposes of determining their interest in the partnership are:

a) 10% of the accounts receivable is to be set up as uncollectible in each book.

b) Merchandise Inventory of Jill is to be increased by Php 100,000.
c) The furniture & fixtures of Jack is to be depreciated by Php 60,000
d) The delivery truck of Jill is to be depreciated by Php 90,000.

REQUIREMENT: ANSWER THIS PROBLEM USING TWO SCENARIOS BELOW

Note: Once everyone is done. I will post the solution so that you will be able to check your own work.
Scenario 1: The partnership will retain either of the books of proprietorship - assume book of Jack will be retaine
1) Adjust each of the proprietorship assets according to the agreement. Adjustments are made to the capital accou
2) Close the books of the proprietorship that will not be used.
3) Accumulated depreciation should be closed to the respective fixed-asset accounts.
4) Record the investments of the closed proprietorship (as per adjustment) to the books that will be used by the pa

Scenario 2: The partnership will open new books

a) Adjust each of the proprietorship assets according to the agreement. Adjustments are made to the capital accou
b) Close the books of proprietorships.
c) Record investments of the new partners in the partnership. Note: Fixed assets should be net of accumulated dep
nesses to form J & J Partnership.

n the partnership are:

r own work.
k of Jack will be retained.
ade to the capital account.

at will be used by the partnership.

ade to the capital account.

net of accumulated depreciation.

Scenario 1: The partnership will retain either of the books of proprietorship - assume book of Jack will be retaine
1) Adjust each of the proprietorship assets according to the agreement. Adjustments are made to the capital accou

Jack Adjustments

a. Jack, Capital 100,000

Allowance for Uncollectible Accounts
To record Jack allowance for bad debts

c. Jack, Capital 60,000

Accumulated Depreciation - F&F
To record the adjustments of the assets of Jack

2) Close the books of the proprietorship that will not be used.

Jack, Capital
100,000 2,600,000
60,000
160,000 2,600,000
₱2,440,000.00
Accumulated Depreciation - F&F
60,000
400,000
₱460,000.00
Allowance for Uncollectible Accounts
100,000
₱100,000.00

ADJUSTED
Jack Jill

Cash PHP 500,000 PHP 400,000

Accounts Receivable 1,000,000.00 800,000.00
Allowance for Doubtful Accounts -100,000 -80,000
Merchandise Inventory 800,000.00 1,100,000.00
Delivery Truck 1,200,000.00
Furniture & Fixtures 1,000,000.00
Accumulated Depreciation - 460,000.00 - 390,000.00
Total Assets PHP 2,740,000 PHP 3,030,000
Accounts Payable 300,000.00 600,000.00
Capitals 2,440,000.00 2,430,000.00
Total Liabilities & Capital PHP 2,740,000 PHP 3,030,000

3) Accumulated depreciation should be closed to the respective fixed-asset accounts.

Accumulated Depreciation F&F 460,000.00

Furniture & Fixtures 460,000.00

4) Record the investments of the closed proprietorship (as per adjustment) to the books that will be used by the pa

Cash 400,000.00
Accounts Receivable 800,000.00
Merchandise Inventory 1,100,000.00
Delivery Truck 810,000.00
Jill, Capital 2,430,000.00
Accounts Payable 600,000.00
Allowance for Doubtful Ac 80,000.00
To record the investment of Jill

J&J
Statement of Financial Position
September 1, 2020'
Cash 900,000.00
Accounts Receivable 1,800,000.00
Allowance for Doubtful Accounts - 180,000.00
Merchandise Inventory 1,900,000.00
Delivery Truck 1,200,000.00
Furniture & Fixtures 1,000,000.00
Accumulated Depreciation
Total Assets 5,770,000.00

Accounts Payable 900,000.00

Capitals 4,870,000.00
Total Liabilities & Capital 5,770,000.00
 book of Jack will be retained.
re made to the capital account.

Jill Adjustments

a. Jill, Capital
100,000 Allowance for Uncollectible Accounts
To record Jill allowance for bad debts

b. Merchandise Inventory
60,000 Jill, Capital
To record the additional merchandise incventory of Jill

d. Jill, Capital
Acc. Depreciation Delivery Truck
To record the adjustment of Jill assets

Jill, Capital
80,000 100,000
90,000 ₱2,500,000.00
170,000 2,600,000
₱2,430,000.00

Merchandise Inventory
100,000
1,000,000.00
₱1,100,000.00

JILL's BOOKs

Jill, Capital 2,430,000.00

Accounts Payable 600,000.00
Allowance for Doubtful Accounts 80,000.00
Accumulated Depreciation 390,000.00
Cash 400,000.00
Accounts Receivable 800,000.00
Merchandise Inventory 1,100,000.00
Delivery Truck 1,200,000.00
To close the books.
ks that will be used by the partnership.

J
nancial Position
r 1, 2020'

1
 80,000
80,000

100,000
100,000

90,000
reciation Delivery Truck 90,000

Acc. Depreciation Delivery Truck

90,000
300,000
₱390,000.00

Allowance for Uncollectible Accounts

80,000
₱80,000.00
Scenario 2: The partnership will open new books
1) Adjust each of the proprietorship assets according to the agreement. Adjustments are made to the capital accou

Jack Adjustments

a. Jack, Capital 100,000

Allowance for Uncollectible Accounts 100,000
To record Jack allowance for bad debts

c. Jack, Capital 60,000

Accumulated Depreciation - F&F 60,000
To record the adjustments of the assets of Jack

b) Close the books of proprietorships.

Jack, Capital 2,440,000

Accounts Payable 300,000.00
Allowance for Doubtful Accounts 100,000
Accumulated Depreciation 460,000
Cash 500,000
Accounts Receivable 1,000,000
Merchandise Inventory 800,000
Furnitures and Fixtures 1,000,000
To close the books. 3,300,000 3,300,000

ADJUSTED
Jack Jill

Cash PHP 500,000 PHP 400,000

Accounts Receivable 1,000,000.00 800,000.00
Allowance for Doubtful Acc -100,000 -80,000
Merchandise Inventory 800,000.00 1,100,000.00
Delivery Truck 1,200,000.00
Furniture & Fixtures 1,000,000.00
Accumulated Depreciation - 460,000.00 - 390,000.00
Total Assets PHP 2,740,000 PHP 3,030,000

Accounts Payable 300,000.00 600,000.00

Capitals 2,440,000.00 2,430,000.00
Total Liabilities & Capital PHP 2,740,000 PHP 3,030,000
c) Record investments of the new partners in the partnership. Note: Fixed assets should be net of accumulated dep

JACK
Cash PHP 500,000
Accounts Receivable 1,000,000.00
Merchandise Inventory 800,000.00
Furniture & Fixtures 540,000
Allowance for Doubtful Accounts 100,000
Accounts Payable 300,000.00
Jack, Capital 2,440,000.00
To record the investment of Jack

Cash
Accounts Receivable
Allowance for Doubtful Account
Merchandise Inventory
Delivery Truck
Furniture & Fixtures
Accumulated Depreciation
Total Assets

Accounts Payable
Capitals
Total Liabilities & Capital
nts are made to the capital account.

Jill Adjustments

a. Jill, Capital
Allowance for Uncollectible Accounts
To record Jill allowance for bad debts

b. Merchandise Inventory
Jill, Capital
To record the additional merchandise incventory of Jill

d. Jill, Capital
Acc. Depreciation Delivery Truck
To record the adjustment of Jill assets

Jill, Capital
Accounts Payable
Allowance for Doubtful A
Accumulated Depreciatio
Cash
Accounts Receivable
Merchandise Inventory
Delivery Truck
To close the books.
hould be net of accumulated depreciation.

JILL
Cash 400,000.00
Accounts Receivable 800,000.00
Merchandise Inventory 1,100,000.00
Delivery Truck 810,000.00
Jill, Capital 2,430,000.00
Accounts Payable 600,000.00
Allowance for Doubtful Accounts 80,000.00
To record investment of Jill

J&J
Statement of Financial Position
September 1, 2020'
900,000.00
1,800,000.00
- 180,000.00
1,900,000.00
1,200,000.00
1,000,000.00

5,770,000.00

900,000.00
4,870,000.00
5,770,000.00
tion Delivery Truck

2,430,000.00
600,000.00
80,000.00
390,000.00
400,000.00
800,000.00
dise Inventory 1,100,000.00
1,200,000.00
3,500,000.00 3,500,000.00